What: Shares of Och-Ziff Capital Management Group LLC (NYSE:SCU) are plunging today, declining more than 14% as of 11 a.m. ET after the company reported discouraging earnings for the fourth quarter.

So what: Och-Ziff disappointed investors with a distributable earnings loss of $36.1 million, or $0.07 per share, for the fourth quarter compared to a consensus estimate that it would break even on a distributable income basis. Furthermore, it said it would not pay a dividend this quarter, whereas analysts expected a small distribution of $0.02 per share, according to Reuters.

The company reported that it had $45.5 billion in assets under management (AUM) at the end of the fourth quarter. It estimated that AUM declined to start 2016, dropping to $43.7 billion as of Feb. 1, 2016.

Last year simply wasn't the year investors wanted to see. Och-Ziff lost roughly 4% of its AUM in 2015, due entirely to customer redemptions (outflows) and distributions to its investors.

Now what: Och-Ziff's funds continue to lose fee-earning AUM, and declines may be accelerating. In Jan. 2016 alone, the company lost $1.2 billion of AUM to outflows, equal to its outflows for full-year 2015.

Unless its fund performance improves, 2016 could be another challenging year. Revenue fell 50% in the fourth quarter compared to the year-ago period, due mostly to a decline in incentive income earned for meeting return requirements on its funds. Incentive income makes or breaks its year, and 2016 will be no different. 

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